Mining company fails in court battle seeking $200 million compensation for revoking concessions in Bolivar State

Caracas Daily Journal (Jeremy Morgan): The Venezuelan government won a minor victory in a New York court when a judge turned down a case brought by two companies claiming the state had renounced judicial rights in Venezuela in a case centered on mining concessions.

According to a statement released by the State Prosecutors Office in Caracas, Judge Naomi R. Buchwald rejected a case brought by Compania del Bajo Caroni (Caromin) and V.M.C. Mining Company C.A. against the state, seeking $200 million in compensation for revoking concessions in Bolivar state. The companies had taken the case to court in the United States arguing that Venezuela had renounced its immunity as a sovereign state and agreed to submit to United States jurisdiction.

Venezuela's defense team argued that the New York court didn't have competence to judge a sovereign state, because, as in other countries including the United States, Venezuela had the right to immunity in the courts of other nations, unless it declared otherwise.

Defense counsel argued that this last hadn't been the case -- and the judge agreed. Furthermore, in her ruling, Buchwald was reported to have cast doubt on the authenticity of a document which was said to have been presented by the companies' legal team suggesting that Venezuela had renounced its sovereign rights. The judge was said to have spoken in terms of probable fraud in ruling on the document.

The defense had been successful in establishing "with preponderant evidence" the lack of a genuine renunciation of sovereign right and, instead, authenticating sovereign immunity. Procurator General Gladys María Gutierrez commented afterwards that Buchwald's ruling had ratified the absolute immunity, perpetuity and prevalence of Venezuelan jurisdiction in the case in an important precedent that could have a bearing on other similar cases against the state. The ruling could also help "contain" the use of judicial processes as a mechanism to commit fraud, she added.